Duel Mandate = Insanity if the by product = socially destructive side effects, unsustainable market dislocations #FED #experiment
11 minutes ago
Category Archive: Global Macro
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No coins, no COIN
Introduction: It is important that move beyond the panic “oh my god” stage, and consider what these events mean for America. On one hand, recessions are not Armeggedon, but part of the normal business cycle. The economy must both inhale and exhale. Let’s not be like the fictional savages, who each winter worry that the [...]
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BofA Gives Details on Loan Modification Program
Nice to see that the Feds aren’t the only ones bailing people out. Tonight I see a release from BofA wherein it essentially bails itself out itself via a $8.4-billion mortgage modification program for people with home mortgages obtained through its Countrywide subprime subsidiary. Granted, it did this at the urging of various state Attorneys [...]
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Tarp And The Ruin Of Pompeii: An Analogy
Economists of all stripes remain puzzled about how Treasury Secretary Henry Paulson’s Troubled Asset Relief Plan is supposed to fix the American financial system. What is not in dispute is that the crisis has been triggered by a collapse in confidence about how much of their debt subprime borrowers will repay. (This affects financial stability [...]
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Open Letter to European leaders on Europe’s banking crisis: A call to action
This is a once-in-a-lifetime crisis. Trust among financial institutions is disappearing; fear may spread. Last week’s US experience showed that saving one bank at a time won’t work. A systemic response is needed and in Europe this means an EU-led initiative to recapitalise the banking sector. Unless European leaders immediately unite to address this crisis [...]
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Reggie’s thoughts on financial mayhem coming into the week of October 5th, 2008
I’ve noticed a few queries as to my opinion of whether financial stocks will get better or if the worst is behind us. I actually thought I made my viewpoint clear. Obviously not, so let me be a bit more blunt. Things are going to get very ugly, starting this week – and from there [...]
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Foreign Press Alert: 6 Oct 2008 – Germany
Germany has moved center stage in the credit crisis despite having not experienced a housing bubble in the run-up to the bust. Switzerland and Japan, along with Germany are three countries I find notable in not having participated in the upside. But with a full scale assault on the global financial system underway, no country [...]
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Plan “B”
Markets are looking ugly around the globe. Investors are voting on the bailout plan with their feet. The crisis is now accelerating. This is a speech I’d like to hear either one of the candidates give. The man who expresses these views (or something close to it) gets my vote: > My fellow countrymen: These [...]
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More Bank, Less Bucks: A Four Point Plan for the Rescue
“Public opinion made [Herbert Hoover] the villain of the Great Depression. In fact, the 31st president was a visionary — but a hopelessly inept politician… Until early 1931, midway through his presidency, Hoover had waged a vigorous offensive against the Depression. International events pushed him back onto the defensive. His overriding goals became damage control [...]
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Germany to Guarantee Bank Deposits; Efforts to Salvage Hypo Bank Continue
In response to the crisis at Hypo Bank, Germany said it will guarantee bank deposits. Note that no action was announced regarding Hypo, whose collapse is expected in the next few days if a rescue is not in place. Hypo is not a depositary institution, but it is sufficiently large (almost as big as Lehman) [...]
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The Germans guarantee all savings deposits
Facing a potential breakdown in its banking system, the German government has decided to offer a blanket guarantee to savings deposits, much as Ireland and Greece have done. As much as I praise this move on the part of the Germans to restore confidence, it still leaves Hypo Real Estate (HRE) dangling on the verge [...]
